This Selected Issues paper examines financial linkages and the correlation between Australian and U.S. output. It shows that the financial linkages have played an important role in conveying shocks from the United States to the Australian economy, and that these have become increasingly...

Economic growth is strengthening, stimulated by the high terms of trade. Monetary policy has been tightened appropriately. A flexible monetary policy response to potential external shocks, including commodity price swings, will help to cushion growth while preserving low inflation. To promote...

Property price inflation has accelerated during the last few years, propelled by low mortgage rates, poor returns from alternative investments, strong employment and immigration, and tax incentives. Strong housing demand has led to a substantial rise in housing prices. Most industrial countries...